Academic journal article Journal of the International Academy for Case Studies

Alibaba: Changing the Way Business Is Conducted in the Information Economy

Academic journal article Journal of the International Academy for Case Studies

Alibaba: Changing the Way Business Is Conducted in the Information Economy

Article excerpt

CASE DESCRIPTION

The primary subject matter of this case concerns the changing nature of international business. Secondary issues examined include unique business strategies and issues of corporate governance. The case is written at a difficulty level of three, appropriate for junior level courses. The case is designed to be taught in one class hour and is expected to require six hours of outside preparation by students.

CASE SYNOPSIS

The Chinese company, Alibaba, is changing the way global business is conducted. This fast growing B2B company has benefited from the explosion in information technology and has developed a unique business model. This case examines Alibaba's success and how the company is unique from most Western companies. With the explosive growth of Alibaba in China, the company is now ready to expand to the rest of the world.

INTRODUCTION

Jack Ma is a man on a mission. The Chinese entrepreneur who founded Alibaba and other companies, wants to change the way business-to-business (B2B) is conducted. He wants to develop a platform to support small and medium sized enterprises (SMEs). Alibaba, Taobao, and other Ma creations have already begun to make some wonder how this former English teacher, with an unassuming demeanor, has been so successful, and what the future holds for his companies and the future of B2B activity.

HUMBLE BEGINNINGS

The founder of Alibaba, Jack Ma grew up in the Chinese city of Hangzhou, a city known for its beauty. Hangzhou has been consistently rated the most livable city in China for a number of years. Ma began his work life as a child, acting as a tour guide in order to improve his proficiency in English. Ma's academic skills in math and science were poor; however, he possessed a talent for languages. After graduating from the Hangzhou Normal College, Ma began teaching English. Not satisfied with the salary of an English teacher, Ma began his own translation business. After a trip to the United States and gaining experience with computers and the Internet, Ma created China's first Yellow Pages company. Ma then started Alibaba in his small apartment and has grown the Alibaba Group into a collection of fast-growth companies including Taobao, Alipay, and Alisoft. While still a humble and frugal man, Jack Ma is building a strong competitive force in the information-based global economy. He is known for not thinking about today or tomorrow, but thinking decades ahead. Jack Ma has a long-term focus which has served him well in becoming one of China's wealthiest individuals. His rise from poverty to prosperity began with a vision, upon which he is constantly expanding.

WHAT'S IN A NAME?

Jack Ma's selection of Alibaba as the name for his company is part of his unique strategy--one mired in symbolism and folklore. How and why did he select such a name? For one, it has a strong identification among people from numerous cultures. It comes from a tale of "The Thousand and One Nights"--a story that featured a poor wood cutter, lots of gold, and 40 thieves.

According to an interview discussion with Jack Ma posted on a company forum, the innovatively driven CEO found himself in a San Francisco coffee shop pondering the word Alibaba. When his waitress came by, he asked what she knew about Alibaba, and she said "open sesame". Following this, he left the restaurant and asked 30 people on the street if they knew Alibaba. They were people from India, Germany, Tokyo, and China. Amazingly, they all knew Alibaba. They also knew aspects of the tale--open sesame and 40 thieves. Ma asserted that Alibaba was not a thief, but rather, a smart, kind business person who helped his village. What a name, he thought. It was easy to spell and had global recognition. His company would "open sesame" for small and medium size enterprises.

The company's controversial name, one associated with thieves, gives it great depth. …

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